The Enron whistle-blower who wasn't

Lynn Brewer, author of Confessions of an Enron Executive: A Whistleblower's Story, has become a globally known authority on what went wrong at Enron. Since 2002, she has given close to 200 speeches around the world. At $13,000 per appearance, she has earned hundreds of thousands of dollars for her company, The Integrity Institute. In her presentations, Brewer recounts the wrongs she witnessed at Enron — a company that grossly overstated its earnings and collapsed into bankruptcy six years ago — and exhorts her listeners to act ethically in all of their dealings.

In recognition of her bravery in speaking out as a whistle-blower, the Nobel Peace Center in Oslo, is featuring Brewer in an exhibition devoted to freedom of speech.

A salute from the people who give out the Nobel Peace Prize is a heady achievement, but what makes Brewer's story truly remarkable is that she appears to have fabricated significant portions of her tale, starting with whether she was ever an Enron "executive" and extending to her claims of being a "whistle-blower."

Instead, a USA TODAY investigation, involving interviews with two dozen former colleagues, reveals Brewer to be an astute self-promoter who parlayed an undistinguished 32-month stint as an Enron employee into a lucrative career in the corporate ethics industry. She appears to have succeeded by modeling herself after another woman regarded as an Enron whistle-blower, Sherron Watkins.

Within the world of business ethics, Brewer is considered a star. She is a founding member of the Open Compliance and Ethics Group. She delivered the keynote address at a Sarbanes-Oxley conference hosted by the New York Stock Exchange in 2003 (there are video clips of it on her website, www.lynnbrewer.info). She has spoken in Great Britain, India, Venezuela, Italy, Canada, Malaysia and New Zealand, and given keynote addresses at dozens of other gatherings in the USA. She's also a regular speaker at universities, where she lectures students on the importance of ethics in business.

Brewer has even co-authored an article in Business Strategy Review with noted management guru Oren Harari showing how the leadership skills of Colin Powell could have been applied at Enron.

But to those who worked with her at Enron, when she was known as EddieLynn Morgan (she changed her name after getting married in 2000), her transformation from back-office researcher to international corporate governance heroine is astonishing.

"I don't think people will even believe this," says Ceci Twachtman, a former colleague, speaking of Brewer's transformation. "It reminds me of that movie with Leo DiCaprio with Pan Am," she adds, referring to Catch Me If You Can, a story about a high school dropout who passes himself off as an airline pilot.

"EddieLynn is a good nurse who is trying to claim she was a brain surgeon," says Tony Mends, a former vice president at Enron who was her boss for much of her tenure at the company.

The story of EddieLynn Morgan's career as an Enron "executive" and "whistle-blower" begins in March 1998, when the Houston energy giant hired her as a senior specialist. She had worked at Peterson Consulting and as a paralegal at Ralston Purina in St. Louis.

Her job at Enron was to head a team that examined natural gas and power contracts, writing brief summaries for managers. That, at least, was how she described her job in a 2001 letter to a class-action law firm. Two years later, in her NYSE speech, her job description evolved into something more sophisticated: "I was recruited in March of 1998 to head a new risk management group …"

Lynn Brewer says she first uncovered fraud at Enron late in 1998. One of her tasks that year, she writes in her book, was to summarize a deal struck by the company in December 1997 through which Enron would receive an indirect loan for $229 million from NationsBank, which has since merged with Bank of America.

To pay back the loan, Enron and its subsidiaries promised to assign 80 billion cubic feet of natural gas from its Bammel storage field in Texas to a trust representing the bank, for net proceeds of $232 million.

Brewer says that Texas state records showed that Enron didn't have the requisite amount of natural gas at Bammel at the time the contract was signed. Because of that, Brewer says, the contract represented bank fraud.

In her book, Brewer says she alerted her boss to the problems with the Bammel deal at the time she was working on it. She also says she wrote a contemporaneous note to her boss describing her concerns. (Brewer provided a copy of this note, along with her six-page summary of the Bammel deal, to USA TODAY.)

But Brewer's boss, Mary Solmonson, after reviewing the summary of the Bammel deal produced by Brewer, says it is in an entirely different format from anything produced by her group. Solmonson had as many as 20 contract briefers such as Brewer working for her.

Solmonson says her department focused narrowly on gas and energy contracts and would not have been asked to brief a complicated financial transaction such as the Bammel deal.

As for the private memo from Brewer to her, the one alleging "bank fraud," Solmonson says she never saw that document or discussed the matter with Brewer.

In response to Solmonson, Brewer says, "The fact that she doesn't remember something 10 years ago out of the thousands of deals we did doesn't surprise me. I don't care. It does not matter to me."

Dissatisfaction

In her book, Brewer says that she was dissatisfied with her job on the legal briefing team and with her colleagues, so she moved to Azurix, an Enron spinoff.

There, she says, she uncovered an example of what she calls corporate espionage carried out by the company's CEO, Rebecca Mark, and her husband, Michael Jusbasche.

According to Brewer, Mark wanted to come up with a catchy Internet domain name that Azurix could use as an online trading platform for water, much as Enron had done in the field of natural gas. Azurix employees and executives brainstormed and came up with several potential website names, including Waterswap.com, Watervault.com and Water2Water.com.

In one case, Brewer says, it was decided on a Friday afternoon that Azurix should register a particular domain name. Part of Brewer's job was to register the site. But on the following Monday morning, when she tried to do so, Brewer learned that Jusbasche had scooped up the domain name Friday evening. Brewer informed her boss, Mends.

In an interview, Mends says he explained to Brewer that on Friday evening, Mark mentioned the domain name to her husband and Azurix's plans to register it. Jusbasche said the company shouldn't wait all weekend before registering the name. Instead, he went ahead and registered it himself, through his own website, ChemicalDesk.com, to prevent an outside party from squatting on it.

Another former colleague of Brewer's, Amanda Brock, who was known as Amanda Martin when she worked at Enron and Azurix, told USA TODAY the same thing.

Brewer saw it differently. She writes in her book that she viewed the domain-name registrations as evidence of an "ongoing criminal enterprise" in which Enron would have to pay Jusbasche for the domain names. In her public appearances, including the NYSE speech, Brewer cites the event as an example of "espionage."

When USA TODAY asked her for any evidence that Jusbasche had been paid off to turn over control of the domain names, Brewer's story evolved. In one interview, she said Diane Bazelides, head of communications at Azurix, had told her that Jusbasche had been paid. USA TODAY contacted Bazelides, who denied ever making such a statement. In a follow-up interview, Brewer said it wasn't Bazelides who'd made the assertion, but someone in the accounting department whose name she couldn't recall.

Departure

In March 2000, Brewer moved from Azurix to Enron Broadband Services' competitive intelligence unit in Portland, Ore. Although she had a new supervisor, her group reported to Mends. It was there that events surrounding a business trip led to her departure.

According to Mends, Brewer was a good researcher who was adept at using databases such as Factiva and LexisNexis. In that capacity, she traveled to various Enron locations to conduct training sessions on how to use Factiva.

Mends says Brewer was scheduled to travel to London in September 2000 to conduct a one-week training session. He also says that Brewer asked whether it was all right if her fiancé, Doug Brewer, tagged along. Mends approved, as long as her companion paid his own way and didn't interfere with her work obligations.

After the trip, Mends' assistant discovered through the receipts filed by Brewer that she had rented a car upon arrival and traveled across England for most of the week. Mends called staffers in London and learned that Brewer never performed the task for which she had been sent. He asked one of his lieutenants, David Gossett, to resolve the matter.

Gossett says that once he learned that Brewer had not done the training she arranged in London, her career at Enron was over.

Brewer says she rented the car and stayed outside of London because of a terrorist threat in the city. (Whatever the terrorist threat may have been, Enron's London office operated normally all week, says Mends.) She also insists that she performed the work that was assigned in London and that she left the company entirely of her own volition on Nov. 13, 2000.

In her book, she says Enron paid her $30,000 in severance and eventually covered the London expenses.

Brewer spent several hours on the phone with USA TODAY discussing her past for this story.

She insisted she was within her rights to describe herself as an executive, even though her title was several grades below what Enron considered to be an executive position. She claims that because she headed up a contract briefing team, she controlled more than $1 million in salaries and overall budget. Therefore, she considered herself an executive.

'I am Enron'

But her boss, Solmonson, says Brewer had no control over budget or salaries and that she herself, as a senior director, would not be considered an executive. Further, Brewer's work had nothing to do with management. "What my group did was very much a clerical function," says Solmonson, "an important clerical function, but it was clerical."

Gossett, Brewer's boss during her last months at the company, scoffs at the notion that she was an executive. He was a director at Enron, he says, and that didn't qualify him as an executive. "There was no way she was an executive, not even with a little 'e,' " he adds. "If she was an executive, she was in charge of nothing."

When it comes to giving specifics about her whistle-blowing, Brewer contradicts herself. In her book, subtitled A Whistleblower's Story, she recounts her failed efforts to alert her immediate superiors to questionable actions. She also says that just before she left the company in November 2000, she called the employee-assistance help line to complain about criminal activity at Enron. She says she was rebuffed there, but instead of taking her complaints to the chief compliance officer at Enron, or regulators at the Securities and Exchange Commission or the Justice Department, she accepted a severance package and left.

In her speeches, Brewer dons a different mantle, presenting herself as one of the collaborators in fraudulent activity at Enron and asking her audience for forgiveness.

In the NYSE-hosted presentation, Brewer says that when she was at Enron, she didn't realize that, "I would somehow be responsible in some form or another for the potential downfall of our capital markets, for which I am deeply saddened." In a separate presentation, also on her website, she adds, "I am no different than the other executives at Enron. … Every one of us is all of us."

It's a theme she repeated in an interview with USA TODAY. "I'm no different from Ken Lay or Jeff Skilling in that we all became complacent because of stock options," she says. (In the late 1990s, stock options were available to employees on a companywide basis, not just to executives.) "I am Enron. The horrible side of me came out. I got to see I wasn't the best person inside the company."

In addition to giving speeches, Brewer runs The Integrity Institute, based in Washington state. The company has three full-time employees.

Nobel recognition

As part of the Nobel Peace Center exhibition of freedom of expression in Oslo, Brewer is featured alongside such luminaries as peace activist Aung San Suu Kyi of Burma and author Salman Rushdie. Two other honorees — Russian journalist Anna Politkovskaya and Dutch filmmaker Theo van Gogh — were murdered because of their work.

Bente Erichsen, director of the Nobel Peace Center, expressed surprise at USA TODAY's inability to verify Brewer's claims about Enron, before adding, "She's not a big part of the exhibition. We haven't censored her story. We're just relating it as she tells it."

Gossett, Brewer's last boss at Enron, says the important part of this saga isn't that she exaggerated her role at Enron. It's her success at becoming a star on the corporate ethics speaking circuit. "It's almost comical," he says, "how everyone let some opportunist come out and snow every single one of them."